Bankruptcy lawyers get asked this question a lot. Does filing bankruptcy stop garnishments?

In actual fact, the proper term for taking money out of your paycheck is wage deduction procedure. It probably does not matter what it is really called because when you are getting money taken out of your pay, it hurts. You just want to know if it stops when you file for bankruptcy.

A creditor cannot automatically garnish your wages unless and until they have a) a judgment awarded against the debtor and b) have filed a Wage Deduction Affidavit in court outlining that you owe them money. That affidavit has to certify they sent you a wage deduction notice letting you know they will be garnishing your wage for the debt owed.

When the affidavit is filed by the creditor, it is filed with a set of written questions that are sent to the employer as well. These are sent to allow the creditor to figure out how much money the employer owes the debtor and to determine the right amount of money to be deducted.

Once the employer gets the questions, they must file them with the court and ensure a copy of their answers go to the debtor and creditor. When that is complete, the court issues a summons to the employer for a court date finalizing how much and when your wages will be garnished.

This is really a painful process for many and something to avoid. If you want to know more about it, call an experienced Iowa bankruptcy lawyer and start asking questions about this and other bankruptcy processes. It is an eye-opener, but it is better to be aware of the consequences of your actions than not.

Here is where things get sticky. There is another kind of garnishment that most people do not know about. It is called the non-wage garnishment, and in that process, creditors may take some types of bank accounts or receivables to collect on the debt owed them. You may hear this referred to as a levy in some places. This information comes as a nasty surprise to people when they discover a creditor has been into their bank account(s).

Again, creditors cannot just institute a non-wage garnishment without following a process similar to the wage deduction procedure. But once the process is started, you have to know they are serious about collecting on their debt. And something else to know is that in a number of states, if a creditor does make a move on a bank account, the bank must freeze assets up to twice the amount of the judgment. That means your money is frozen until your case is sorted out.

So back to the question about how filing for bankruptcy can stop garnishments. The instant you file, the automatic stay kicks in and halts certain lawsuits, foreclosures, evictions, collections harassment and garnishments. For further information, speak to a qualified Iowa bankruptcy lawyer.

The last thing you want to do is mess up while filing for bankruptcy. Always use a trained bankruptcy lawyer.

If you want to make sure the bankruptcy process goes smoothly, and that you do not somehow accidentally get discharged because you made a mistake that could cause you to be charged with fraud, use an experienced Iowa bankruptcy lawyer. It is worth it as the lawyer will help you get through the filing without any glitches. After the bankruptcy, you will get to have a fresh start with your finances.

If you think you can do it on your own, or have someone else do it for you, you should know that there are nine prohibited activities according to section 152 of the U.S. Attorney’s Manual. Those prohibited activities are:
– Concealing property the debtor owns
– Making false accounts or oaths
– Making false declarations, verifications, statements and certifications is under the penalty of perjury
– Making false claims against the debtor’s estate
– Fraudulently receiving property from a debtor
– Extortion and bribery
– Concealing or transferring property
– Destroying or hiding documents detailing the affairs or property of the debtor
– Withholding documents from bankruptcy case administrators

In other words, you might want to think twice about trying to file bankruptcy on your own unless you have an in-depth grasp of all the rules, regulations and pitfalls of attempting to do it yourself. If you make a mistake and get charged with fraud, it does not all end with your simple, yet heartfelt plea that you messed up by accident.

Maybe you did, but when you have at least three different government departments and who knows who else on your case, the innocent mistake often ends up looking like planned fraud. Often the Department of Justice, the U.S. Bankruptcy Court system and the IRS jump into cases where they think there has been fraud. You really do not want the IRS investigating you. To put it bluntly, there is a whole lot at stake for you when you choose to file for bankruptcy, so ensure you do it the legal and above-board way by using an Iowa bankruptcy lawyer.

Filing your bankruptcy through the system and with legal counsel will prevent the probability of being prosecuted for bankruptcy fraud. If you think filing for bankruptcy is difficult, being prosecuted for bankruptcy fraud is 10 times your worst nightmare. Bankruptcy is tough enough for people without living in fear that they messed up when filing and that the government may come after them. By using an experienced Iowa bankruptcy lawyer, you will know you are on the right side of the law.

If you still think it is worth trying to file on your own and bend the rules, you might want to read some case studies about people who chose to try and fleece the bankruptcy system and got caught. You can read those current, 2011 cases at: http://www.irs.gov/compliance/enforcement/article/0,,id=228083,00.html